Key Takeaways
- It is essential to know how are credit card late payment fee calculated in Malaysia.
- The credit card late payment fee structures consist of three elements: a fixed percentage based on the overdue payment, a tiered pricing system, and a clause regarding late payment interest.
- In Malaysia, the calculation of credit card late payment fees primarily entails two components intended to mirror both the owed amount and the tardiness of the payment: a fixed charge and a variable percentage.
Understanding how are credit card late payment fee calculated is crucial for Malaysian cardholders to navigate their financial obligations effectively.
With various fee structures in place, knowing the components involved in calculating these fees can help individuals avoid unnecessary penalties and manage their credit responsibly.
What are Credit Card Late Payment Fee Structures in Malaysia?
The fee structures in Malaysia can vary, but they typically include the following:
1. Fixed Percentage of Overdue Payment
When borrowers miss their monthly repayment obligation, they may incur a late payment charge as a percentage of the overdue amount.
This percentage often falls within the range of 3% to 5% of the scheduled monthly instalment.
For instance, if the outstanding amount on a credit card is multiplied by 5%, borrowers are urged to make payments before the due date to avoid incurring late payment charges.
2. Tiered Pricing Structure
Credit card issuers may implement a tiered pricing structure based on the borrower’s payment behaviour.
For instance, borrowers who promptly settle their minimum payment for 12 consecutive months may enjoy a lower interest rate (Tier 1).
On the other hand, those who do so for at least ten months in a 12-month cycle may have a slightly higher rate (Tier 2).
3. Late Payment Interest Clause
Some credit card agreements include a late payment interest clause, imposing additional interest on the overdue amount.
This interest is often calculated at a monthly rate, ranging from 1% to 2%, and compounded until the payment is made, resulting in an annual percentage rate of 12% to 24%.
How to Calculate Credit Card Late Payment Fee in Malaysia?
Calculating credit card late payment fees in Malaysia involves two main components designed to reflect both the amount owed and the lateness of the payment:
- Fixed Charge: This is a predetermined amount charged regardless of the unpaid balance. It serves as a penalty for missing the payment deadline.
- Variable Percentage: This is a percentage of the unpaid balance. The more you owe, the higher this portion of the fee will be.
For example, let’s consider a scenario where a bank charges a fixed late payment fee of RM10 plus 1% of any unpaid balance.
If the unpaid balance is RM1000, the late payment fee will be calculated as follows:
- Fixed Charge: RM10
- Variable Percentage: 1% of RM1000 = RM10
- Total Late Payment Fee: RM10 (Fixed Charge) + RM10 (Variable Percentage) = RM20
This mechanism encourages cardholders to make timely and full payments, as the fee increases with the amount owed and the duration of the delay.
Understanding your bank’s unique late payment fee structure is crucial, as it may differ across various banks.
Always refer to your credit card agreement or consult your bank directly for precise information regarding late payment fees.
Read More: How to Compare Personal Loans in Malaysia: What to Consider
Bluebricks’ Loan and Consultancy Services
Navigating credit card late payment fees in Malaysia requires a comprehensive understanding of the different fee structures imposed by banks.
As a debt consolidation agency, our financial experts assist in familiarising borrowers with these structures and calculating potential fees so that you can better manage your finances.
Bluebricks offers a wide range of loan-related services, including:
- Personal loan services
- SME loan services
- Mortgage loan services (for buying a new home, refinancing and cashback purposes)
- Collateral loan services
In addition, we provide financial consultancy services by assessing:
- The specific required loan amount.
- How urgent the loan amount is.
- Whether a property has been held by you or your parents for over ten years.
- Your income level.
- Your CTOS score (such as your credit score and credit history).
Why Bluebricks
1. One of the Top 10 Leading Loan Agencies in Malaysia
Our loan agents represent both individuals and businesses, offering technical and financial advice to help secure loan approvals. Even if banks have previously rejected you, we provide access to a broad spectrum of loan options. Our aim is to enhance the success rate of your loan applications and minimise rejections.
2. Over 10 Years of Experience
With over a decade of experience and current banking knowledge, we excel in securing personal, business, mortgage, and collateral loans, navigating challenges like CTOS/CCRIS, and guiding clients confidently towards successful loan approvals.
3. One-Stop Solution
We provide a one-stop loan service, compiling various options from banks and credit institutions for you. Simply submit your income statement, assets, liabilities, employment record, and credit history, and we’ll handle the collateral and documentation to streamline your loan approval process.
4. Full Financing with 100% Bank Loans
We ensure 100% bank loan availability to provide full financial support, making it easier to achieve your goals and build a positive credit history.
5. No Upfront Payment Required
Our no upfront payment policy is designed to ease your financial journey, allowing you to start your investment without initial costs, reducing immediate burden and demonstrating our commitment to your satisfaction and trust.
